Wages supported by cost-of-living measures: employers

Government cost-of-living relief should be factored into the minimum wage increase, one of Australia's largest employer groups says.

The Fair Work Commission held a final hearing in Sydney on Wednesday, ahead of its minimum wage decision.

The Australian Industry Group put forward a wage increase of 2.8 per cent, while the ACTU is seeking five per cent.

This recognised the "challenging circumstances for both employers and employees".

Ai Group workplace relations policy head Brent Ferguson said the government's measures which would help workers with cost-of-living pressures, and the stage-three tax cuts should be taken into account.

"The grant of increases of the scale contemplated by the ACTU would have profound effects on employers covered by the awards and the broader community," he told the hearing.

"Such impacts need to be carefully weighed in any determination of whether any additional increase could be granted."

Australian households will get a $300 energy bill rebate in the 2024/25 financial year. Labor's changed tax cuts also come into effect from July 1.

The commission's decision will impact the pay of 2.6 million workers, or one-in-four employed Australians.

The ACTU says a five per cent increase is necessary for workers to recover real wages lost during the COVID-19 pandemic and to manage soaring costs.

It's also proposing a nine per cent increase for workers in feminised industries, which would mean a full-time care worker would get a $90-per-week boost to their pay.

ACTU president Michele O'Neil said a pay rise was good for the economy.

"For the employer groups to jump on cost-of-living measures like the $300 energy rebate to argue for lower wages is an insult," she said.

"Big business wants the cost-of-living relief to go into their pockets instead of the pockets of our lowest-paid workers."